Buying Your First Home? Here are the Top 5 Things You Need to Know
Buying your first home can be an exciting experience! But it can also be a confusing one. A house may well be the biggest purchase you have made up to that point – or that you will ever make again. The transaction is a lot more complicated than what you’ll experience buying a piece of furniture or even something larger like a vehicle.
Working with a great real estate agent, whether you’re here in Durham or elsewhere, can help you get educated on the whole process, step-by-step, and can help you feel more confident. Here are five things that you need to know about buying your first home:
There’s No Such Thing as the ‘Perfect Home’
A lot of people hold out hope that they’ll find their “perfect” home, and they end up spending months or even years on the process and end up with nothing at the end. The reason is that there is no such thing as the perfect home. You might find a house that looks exactly like what you want, but you might find out that it needs new plumbing. Or you might find a house that is structurally sound, but it is painted in ugly colors. You might even find something that hits all the checkmarks, but it’s not in an area that you want or is costs more than you can afford.
You need to be ready to compromise. Work with your real estate agent to make a list of priorities, including what features you want in a house, where it should be located, and how much it should cost. Then make a list of things that would be “nice to have.” When evaluating houses, keep in mind your priorities, and remember that you can add things later.
How Much Can You Afford?
It can be hard figuring out how to translate house prices into actual monthly costs. Working with a good mortgage broker can help you understand how much you can afford, and an experienced real estate broker can recommend a good mortgage broker for a first time home buyer.
Generally, lenders recommend that home buyers can afford a payment of 28 percent of their monthly, gross income. The payment should include the mortgage itself, taxes, and estimated maintenance. So, if you make $4,000 a month, you should be able to afford a monthly payment of about $1,120. Talk this through with your real estate broker and mortgage lender to determine how a home’s price will translate into a monthly payment.
What are Your Tax Credit Options?
As a first time home buyer, you may qualify for a tax credit. You can use that money to make repairs on the home or to make the first year of homeownership more affordable. Some even use the money to pay down their principal.
You may qualify for other tax credits that can make your home buying experience more affordable. A lender can help identify what’s currently being offered in your area.
You Must Do Due Diligence
Making the offer on a house is only the beginning of a sale. After your offer is accepted, you enter a due diligence period. During this time, you should hire an inspector and get a full report on the home’s condition. You may be able to ask the seller to make repairs, or you may use information discovered about the house to negotiate on the price.
You Need a Good Real Estate Agent
You might be tempted to try to shop by yourself after reading a lot online. But you really need an expert by your side, guiding you through the process while also protecting your interests. A local, experienced real estate agent can do that for you.
If you are ready to shop for your first home, call me and let’s discuss what you’re looking for. I am ready to help you find the best home for your budget and your needs. Call me today to start the search for your first home in Durham and the surrounding area.